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The Bangko Sentral ng Pilipinas has lifted its policy rate to 5.0%, the third 25-basis-point increase since April, with inflation now forecast at 6.4% for 2026 and 4.5% for 2027. The next Monetary Board meeting is October 22. Here's what the hike means for your savings, your loans, and the digital bank rates that haven't moved.
By Chai Cabana·How we check our numbers
MANILA — The Monetary Board of the Bangko Sentral ng Pilipinas (BSP) raised its key policy rate by 25 basis points to 5.0% at its August 27 meeting, its third consecutive increase this year.
The interest rates on the overnight deposit facility and the overnight lending facility were adjusted to 4.5% and 5.5%, respectively.
The central bank has now tightened by a cumulative 75 basis points in 2026, following hikes in April and June.
The BSP expects inflation to average 6.4% in 2026 and 4.5% in 2027, according to Deputy Governor Zeno Abenoja — both above the government's 2% to 4% target range.
BSP Governor Eli M. Remolona Jr. has said elevated global oil and fertilizer prices continue to put pressure on domestic fuel and food prices, and that rising core inflation indicates price pressures are spreading through second-round effects.
The BSP has also flagged El Niño, which is expected to raise both domestic and global rice prices, and minimum wage adjustments as risks to the inflation outlook. In its June Monetary Policy Report, the central bank said monetary policy "can serve to break the link between supply side shocks and second round effects," citing transportation fare hikes and minimum wage increases as examples.
Metro Manila's minimum wage is set to rise by ₱60 on September 26 under Wage Order No. NCR-28.
The Monetary Board has two policy meetings left this year, on October 22 and December 17, according to the BSP's published schedule.
Savings. Higher policy rates lift the yields banks earn on BSP term deposits and government securities, which typically feed through to time deposit and money market fund rates first. Regular savings rates at digital banks have been slower to move; most base rates remain between 3% and 4.5%, with higher tiers gated on conditions such as deposit size or app activity.
Loans. Banks reprice home, car, and personal loans upward after a policy hike. Anyone on a variable-rate loan should expect a higher amortization at the next repricing date. Fixed-rate loans already booked are unaffected until their fixing period ends.
Government programs. Pag-IBIG housing loan rates and the SSS salary loan rate are set by their respective boards, not by the BSP, and have not changed.
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